The best property to give to charity
Giving to charity is not only personally satisfying, the IRS (and possibly your state) also rewards you with generous tax breaks.
- Current income tax deduction if you itemize, subject to certain percentage limitations for any one year
- Tax benefit received reduces the cost of the donation (e.g., a $100 donation from someone in a 30 percent tax bracket has a net cost of $70)
- Reduces or eliminates capital gains tax if appreciated property is given
- No transfer (gift and estate) taxes imposed
- Removes any future appreciation of the donated property from your taxable estate
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| Highly appreciated or rapidly appreciating property* Such as:
- Intangible personal and real property (e.g., stock or real estate)
- Tangible personal property (e.g., art, jewelry)
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| Cash
- Easy to give--the type of donation most charities like best
- Be sure to get a receipt or keep a bank record, regardless of the amount
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| Income-producing property* Such as:
- Artwork (if given by the artist)
- Inventory
- Section 306 stock (stock acquired in a nontaxable corporate transaction)
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| Tangible personal property* Such as:
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| Remainder interests in property Lets you use the property, or income from the property, until a later date. Gift and estate tax deductions are not allowed unless a trust is used. You may only take the income tax deduction in the year that the gift is actually conveyed.
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